November 1, 2018 / 6:23 AM / 15 days ago

Aircraft lessor Dubai Aerospace plans to raise $1.25 bln

DUBAI, Nov 1 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world’s largest aircraft lessors, plans to issue $1.25 billion in senior notes, it said late Wednesday.

The notes will be offered by DAE Funding, a fully owned subsidiary of DAE. The proceeds will be used for general corporate purposes, and maybe, to repay some of the existing debt, the aircraft lessor said.

Rating agency Moody’s upgraded the firm to “Ba1” from “Ba2” on Wednesday, “after considering the positive effects of the company’s increasing funding diversity on its financial and operational flexibility,” it said.

The agency expected a reduction in Dubai Aerospace’s debt to equity leverage ratio, and cited it as a reason for the rating upgrade.

State-owned aircraft lessor DAE said last month it had increased an existing $480 million four-year revolving credit facility to $800 million.

Moody’s expects the government-owned Dubai firm to increase the facility further to $1 billion, it added.

DAE, set up in 2006, became one of the world’s largest aircraft lessors after acquiring Dublin-based AWAS last year, when it issued $2.3 billion in senior bonds split across three tranches, partly to finance the acquisition. (Reporting by Davide Barbuscia, Editing by Sherry Jacob-Phillips)

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